Bid & Proposal
Bid Bond
A bid bond guarantees a project owner that if your bid is accepted, you will sign the contract and provide the required performance and payment bonds.
- Required by
- Project owners on public works (federal, state, county, city) and some private owners
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The project owner is the obligee. If the low bidder refuses to sign the contract or cannot furnish the final bonds, the surety pays the owner its damages, usually the difference to the next bid, up to the bid bond amount. The bond is usually a percentage of the bid.
Who needs it
- General contractors bidding public works
- Subcontractors asked for bid security
- Contractors bidding private jobs that require bid security
What the underwriter looks at
- Contractor's financial statements and working capital
- Experience with similar work
- Current work in progress
- Credit of the owners
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How large is a bid bond in Alabama?
Alabama public works generally require bid security of at least 5 percent of the bid. Mobile County, for example, requires not less than 5 percent but not more than $10,000. Check the bid documents, since the cap has been amended and ALDOT has its own rules.
Which BaySide application should I use?
Use the Express Bid Bond Application for bids of $350,000 or less, and the full Bid Bond Application for bids over $350,000.