What is a bid/tender bond?
This bond is issued when a procuring entity is obtaining tenders for a contract and requires a bond as security against the risk of the successful bidder failing to enter into the contract.
- It provides a guarantee that projects will be completed as expected – even if the contractor fails
- It is an inexpensive way to protect the public interest and assure contracts are completed on time, for the agreed-upon price
This bond shields business entities from losses should a contractor who has successfully landed a project breach contract terms by failing to take up the project or asking for increased payment. Should the contractor default, the project owner can file a claim against the bid bond, which the guarantor has to pay to acquire the services of another contractor or to match the face value of the bid bond.
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- Organization's structural chart
- Business plan
- Work records
- Completion plan
- Proof of a line of credit
- Recommendations list