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Bid Bond basics

When you submit a bid on a contracting job, consider adding a Bid Bond to assure the project owner that you'll honor your bid. A bond can help you protect your rights and obligations, and since a Bid Bond acts like a guarantee, it can also make your bid look more attractive.

Use the Bid Bond document if:

  • You are ready to enter into bid bond and you want to define the terms and conditions of such Agreement.

A Bid Bond allows you to guarantees that a contractor or construction company will honor a bid, since the bid is bonded or backed by financial and insurance brokers. Bid Bonds let clients know that when they accept a bid, they'll get what was proposed. The bonds also help contractors assure the project owner that their bid is the best option. Your Bid Bond should include information like: the name of the contractor placing the bid; the party requesting the bid; a description of the construction project, and its location; the name of the surety company guaranteeing the bid; the amount that is guaranteed; the number of days in which the final contract must be signed if the bid is accepted; and who will sign the Bid Bond, and when. Contractors should be aware that a Bid Bond will typically cost you a small percentage of the full contract amount; however, having a bond may help you land the contract in the first place, and some clients require it.

Other names for this document: Bid Bond Guarantee

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