Bid Bonds: What are they? Who do they protect?
Bid bonds provide a guarantee to the project owner that the company submitting the bid will enter the contract at the proposed dollar amount and terms. In the event the winning bidder does not enter the contract, a claim can be made on the bid bond by the project owner to cover the difference between the lowest and second bidder. The requirement for bid bonds is often 5-10% of the proposed contract amount; however, federal bid security is commonly 20%. The winning bidder will need to provide a performance and payment bond for the release of the bid bond.
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To get a bid bond, establish a connection with a Parrot Surety Producer.
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