A guarantee that if a contractor wins the bid, they will actually sign the contract at the price they offered.
A bid bond is a surety instrument that guarantees a bidder will enter into a contract at the bid price if awarded. If the winning bidder fails to execute the contract, the surety pays the owner the difference between that bid and the next acceptable bid. Bid bonds are typically required on public projects and large private projects.
The county required a bid bond equal to 5% of the bid amount from all general contractors bidding on the courthouse project.
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