00:17
Faizan
1. What is the bid bond amount? They are issued for an amount stipulated in the bid invitation. The specifications often require a security equal to 10 or 20% of the bid amount. In some cases, the dollar value is preset. For example on New Jersey public work, the dollar value is normally a maximum of $20,000 regardless of the proposal amount.
2. Does my financial statement need to show the same amount in cash to qualify for the bond? Not necessarily. The approval is based on the total financial picture.
3. What happens to the bid bond after the bid opening? As time passes (90 days depending on the surety) it becomes void automatically.
4. Do I have to return it to the surety? No.
5. What happens if I'm 2nd or 3rd bidder? Your bid security is held until the contract is awarded so that the obligee has the option to give you the project if they wish. This is a good reason not to use cash security in lieu of a bond.
6. 4th, 5th or higher? You are released from any obligation.
7. How much of my bonding capacity is consumed when the bid bond is issued? The Contract amount is deducted from the available capacity.
8. When does my capacity get restored? It is restored when the surety is notified that you are not the "apparent low bidder."
9. What if I decide not to bid the project at the last minute? Notify the surety and the transaction will be deleted.
10. Can there be a claim? Absolutely! That's the reason it is required.
11. Do all public projects require them? Generally yes, with the exception of small contracts, emergency work and a few other categories. Some federal projects only require a bonding capacity letter from the surety.
12. If I don't have a bonding company, can I still bid the project? Yes, with alternative bid security that may be described in the bid specifications. However, if upon award you cannot satisfy the performance bond requirement, the bid security could be forfeited.
13. What is a capped bid bond? This does not support a proposal amount in excess of a set dollar figure.
2. Does my financial statement need to show the same amount in cash to qualify for the bond? Not necessarily. The approval is based on the total financial picture.
3. What happens to the bid bond after the bid opening? As time passes (90 days depending on the surety) it becomes void automatically.
4. Do I have to return it to the surety? No.
5. What happens if I'm 2nd or 3rd bidder? Your bid security is held until the contract is awarded so that the obligee has the option to give you the project if they wish. This is a good reason not to use cash security in lieu of a bond.
6. 4th, 5th or higher? You are released from any obligation.
7. How much of my bonding capacity is consumed when the bid bond is issued? The Contract amount is deducted from the available capacity.
8. When does my capacity get restored? It is restored when the surety is notified that you are not the "apparent low bidder."
9. What if I decide not to bid the project at the last minute? Notify the surety and the transaction will be deleted.
10. Can there be a claim? Absolutely! That's the reason it is required.
11. Do all public projects require them? Generally yes, with the exception of small contracts, emergency work and a few other categories. Some federal projects only require a bonding capacity letter from the surety.
12. If I don't have a bonding company, can I still bid the project? Yes, with alternative bid security that may be described in the bid specifications. However, if upon award you cannot satisfy the performance bond requirement, the bid security could be forfeited.
13. What is a capped bid bond? This does not support a proposal amount in excess of a set dollar figure.
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