Bonding Capacity Prudency Audit

Power City

Austin, Texas

Client: Kemper Insurance Company. Austin, Texas
Construction Cost: $57,000,000
Construction Completion Date: 1988-1989

Kemper Insurance Company asked DiGeronimo PC to conduct a prudency audit of Power City, a high-power electrical contracting firm. A prudency audit is an evaluation of the contractor’s capability to support additional bonding capacity.

Power City's primary business is cross-country high-power electric service. Power City had three contracts totaling $57 million bonded by Kemper Insurance Company. The three contracts encompassed high-power electric lines being laid for utility companies in San Diego County, California; Portland, Oregon; and Seattle, Washington. A majority of the construction sites were in remote, heavy terrain accessible only by helicopter.

DiGeronimo PC evaluated the construction progress of these projects, investigated the financial stability of Power City, and established a management profile to determine whether there was justification to increase the bonding capacity to Power City by Kemper Insurance. The report was favorable and Power City’s bonding capacity was increased.