What is a DoD Performance Bond?DoD Bonds are required of all freight carriers in order to transport military freight. They are mandated by a wing of the military called the Surface Deployment and Distribution Command (SDDC). The bond amount is based on the size of the company and how many states they serve. Movements must begin and end in one of the selected states.
- $25,000 for transporting in one state
- $50,000 for transporting in up to five states
- $100,000 for transporting nationwide
Learn more about the SDDC’s Freight Carrier Registration Program (OMB No. 0702-0088).
Questions about Department of Defense (DoD) Performance Bonds
What do DoD Performance Bonds guarantee?
They secure performance and fulfillment of carrier obligations to deliver military freight. The bond covers instances where a freight carrier is unable or will not deliver military freight they’ve been contracted to move, which can include abandoned shipments and bankruptcy by the carrier. The bond does not cover operational problems, such as late pickup or delivery, or damaged cargo.
How much does a DoD Performance Bond cost?
Annual premium amounts are determined based on owner personal credit. Applicants with stellar credit may be eligible for standard market rates, which range from 1% to 3% of the bond amount. If the owner has less than perfect credit, or past due items on their credit report, annual premium typically ranges between 4% and 10% of the bond amount.
Can I get a DoD Performance Bond if I have bad credit?
Yes. While many sureties only offer quotes to customers with stellar credit, Lance Surety has an exclusive DoD Performance Bond Program that allows us to approve over 99% of applicants instantly through our online application. Your annual premium will depend on the business owner’s credit profile.
How long does it take to get bonded?
You can get a free quote for a DoD Performance Bond in just minutes by completing our online application. Once you receive a quote, pay the premium and send in a signed copy of the agreement, we can get started on your bond right away. Typical turnaround time is with 24 to 48 hours, depending on how long it takes to receive filing confirmation from the SDDC.
How are DoD Performance Bonds filed?
Once purchased, your bond will be electronically filed with the SDDC by the surety company. The SDDC does not require the original bond. Once your bond has been accepted by the SDDC, you will receive filing confirmation from the surety. Your confirmation will include instructions for obtaining an Electronic Transportation Acquisition (ETA) password, which will give you access to DoD transportation programs, etc.
What is a SCAC?
SCAC stands for Standard Carrier Alpha Code. It is a uniquite two-to-four letter code used to indentify transportation companies. These codes are issued through the National Motor Freight Traffic Association (NMFTA). You will need a SCAC in order for your bond to be filed with the SDDC.
Can a trust fund be used instead of the bond?
No. The SDDC will not accept trust funds in lieu of a DoD Performance Bond.