There are three parties involved in each Bid Bond:
Bid Bonds are meant to ensure that contractors' bid proposals are serious by demonstrating to the developers that the contractor has the ability to complete the bid. Project owners and developers began requiring Bid Bonds to combat the practice of contractors submitting low bids and then failing to complete the job or increasing the price of the job once they had been awarded the contract.
A Bid Bond is issued in the amount of the contract bid, with the same standards as that of a Performance Bond.
Typically Bid Bonds are inexpensive. They cost anywhere from free to around $350. If the contract is awarded, the performance bond will be required. Usually, the performance bond costs between 1% and 5% of the value of the "penal sum," which is the amount that the surety will need to pay to the obligee in case the contractor breaches the contract. The cost of Bid Bonds varies based on several factors, such as the contract terms, where the bid was executed, and the bid amount.
If you withdraw your bid before the developer opens it, then you will not lose your bond. You will lose your Bid Bond if you withdraw your bid after you have been awarded the contract.
Applying for a Bid Bond is very similar to applying for a Performance Bond, because when a surety provides you with a Bid Bond, they agree to provide a Performance Bond in the event that your bid is accepted.
To apply, you will need:
For bids on projects above $250,000, you will need to provide other financial information as well. Contact Viking Bond Service today for a free consultation to find out what you need to secure your Bid Bond.
We provide "Fast Track" programs for contracts of $250,000 or less. Our contract performance bond specialists can help get your bond request started on the correct path so that you can get your bond when you need it.
The bonding process for an Auto Dealer is simple. Start with a quote, end with your bond in hand. We keep the process simple.
Viking can get you from bond application to bond in hand quick and easy. We work with both good and bad credit clients. Get started here.
Quotes are available for clients with low credit. In many cases, a bond is not out of reach simply due to bad credit.
Viking can quote your Auto Dealer Bond within 24 hours. We provide great rates and accept good and bad credit.