What is a bid bond Why do you need one A bid bond is a type of surety bond, which guarantees that Why are more owners/developers requiring a bid the bidder will accept the project and complete it according bond? to its terms. It provides assurance to the...
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What is a bid bond Why do you need one A bid bond is a type of surety bond, which guarantees that Why are more owners/developers requiring a bid the bidder will accept the project and complete it according bond? to its terms. It provides assurance to the project owner that the bidder The simple answer is risk. Given the uncertainty of has the expertise to finish the job once they are awarded. the marketplace, which includes long-time contrac- tors closing their doors, to municipalities filing The Bid Bond prequalifies the principal and provides the bankruptcy (or just slow paying), has led to the necessary security to the owner, or “obligee,” guaranteeing owners being afraid that their contractors will be that the principal will enter into the contract, if one wins the unable to complete the work. So, they require bid. some protection. How it is issued: It is issued as part of a bid by a surety bond Most contain a cash deposit, which is subject The bid bond assures that if the bidd
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