Which of the following is required of a contractor before issuing a bid or contract bond?

The requirement for a contractor to possess capital, capacity, and character before issuing a bid or contract bond is fundamental in ensuring that the contractor is qualified and capable of fulfilling the obligations of the bond.

Capital refers to the financial resources a contractor has access to. This is crucial because it ensures that the contractor can manage the project's costs and sustain operations during any potential challenges that may arise. It reflects the contractor's financial stability, which is a significant factor in risk assessment for surety companies.

Capacity refers to the contractor's ability to perform the work as outlined in the bid. This includes not only having the right experience but also the workforce and physical resources necessary to complete the project on time and within budget. It encompasses the skills and systems in place that are required for the execution of the specific bond-related project.

Character represents the contractor's reputation and integrity in the industry. Sureties evaluate a contractor's history of dealing fairly and ethically with clients, subcontractors, and suppliers. A contractor with a demonstrated record of reliability and trustworthiness is more likely to honor the obligations of the bond, which is vital for the surety company when underwriting the bond.

These three elements work together to provide the surety company with the assurance that the contractor is not only