Bid Bonds
Bid Bonds
The bond that backs your bid and tells a project owner you will stand behind it. Request a quote and we turn it around for your deadline, in 48 states.
What a bid bond is
A bid bond is a guarantee attached to your bid. It tells the project owner — the obligee — that if you are awarded the contract, you will enter into it and post any performance and payment bonds the project requires. If you win and then walk away, the owner can claim against the bid bond. It is a guarantee to the owner, not insurance for you.
What the federal rule requires of a bid guarantee
On federal construction work the bid bond is called a bid guarantee, and two sentences of the Federal Acquisition Regulation govern it. When one is required is set by FAR 28.101-1(a): “bid guarantees shall be required whenever a performance bond or a performance and payment bond is required.” The requirement is waivable, but only by the chief of the contracting office — not by the contracting officer running the buy.
What it must be worth is set by FAR 28.101-2(b): “The bid guarantee amount shall be at least 20 percent of the bid price but shall not exceed $3 million.” Two things follow. It scales with your bid, so the number on the bid guarantee is not a fixed sum an agency picks; and it is capped, so on very large work the guarantee stops growing while the bid does not. FAR 28.101-2 also limits the acceptable forms on construction contracts to separate bid guarantees.
The first sentence is the one contractors most often read past. A bid guarantee is required because performance and payment bonds are required — so if a federal solicitation asks for a bid guarantee, it is telling you the job is bonded work and your surety needs to be able to write the performance and payment bonds behind it before you bid, not after you win.
Where the states differ
State bid-bond rules do not live in the Little Miller Act statutes that set the performance and payment bond thresholds; in most states they sit in a separate procurement chapter, which is why a state public-works bond guide and a state bid-bond rule are two different reads. What the federal frame does tell you is the shape of the question:
And the state reads whose bid-security rule is the story:
Who needs one
Contractors bidding on public projects and many private ones. Owners and agencies require a bid bond with each bid so that every bidder has something at stake and the award process is not derailed by a bidder who cannot, or will not, sign the contract.
How to get one
Request a quote with the project, obligee, and bid amount. Because a bid bond commits the surety to the performance and payment bonds that follow if you win, we underwrite it rather than issue it from an instant portal — tell us about the project and we turn it around well inside your bid deadline. If the job will also need performance and payment bonds, say so up front so the underwriting lines up for the award.
A bid bond is the first step in a sequence:
What drives the cost
Bid bonds are short-term and often carry little or no premium on their own — the surety is really underwriting the performance and payment bonds that follow if you win. The drivers there are your financial strength and the contract size. We confirm any bid-bond cost from the live program when you request it, rather than publishing a figure that would go stale.
Request a bond quote
Tell us about the bond and the project. A licensed producer follows up — these bonds are individually underwritten, so they are not issued instantly.
Browse by state
Find the bid bonds your obligee requires. We write bonds in 48 states; states we have built out link straight through, and the rest are still covered — call 317-942-0549 and a producer will place your bond today.
- Alabama
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Other bonds we write
Frequently asked questions
- What is a bid bond?
- A bid bond backs your bid on a project. It guarantees that if you are awarded the contract, you will enter into it and provide any performance and payment bonds the owner requires. It gives the project owner confidence that your bid is serious.
- Why do project owners require a bid bond?
- It protects the owner from low-ball bids and bidders who walk away. If the winning bidder backs out, the owner can claim against the bid bond for the added cost of awarding to the next bidder.
- How fast can I get a bid bond?
- Request a quote with the project, obligee, and bid amount and we turn it around well inside your bid deadline. Because the surety is underwriting the performance and payment bonds that follow if you win, a bid bond is requested through us rather than issued from an instant portal.
- What does a bid bond cost?
- Bid bonds are short-term and often carry little or no premium, because the surety underwrites the larger performance and payment bonds that follow if you win. We confirm the cost from the live program when you request the bond.
- What happens if I win the bid?
- You enter the contract and, for most projects, post a performance and payment bond. The bid bond did its job — it guaranteed you would stand behind your bid — and the underwriting rolls into those final bonds.
- What if I back out after winning?
- The obligee can file a claim on the bid bond for the difference between your bid and the next acceptable bid, up to the bond amount. As with any surety bond, you are responsible to repay the surety for a valid claim.
