Bid Bond: How To Negotiate It

The Bid Bond guarantees the Employer that the bidder will sign the contract, if awarded, or will comply with other specified obligations (such as to issue other bonds as provided in the bidding documentation). They are rather frequent, especially in mid/big size projects.

Among the several bonds normally used in construction contracts, the Bid Bond does not represent a big risk for the Contractor/bidder provided that he has carefully ascertained all the bidding conditions and documents and he is really willing to sign the contract and execute the construction works if the contract is awarded to him.

The Bid Bond normally is issued in the form of an on-demand bond in a percentage between 1% and 5% of the contract value, but the percentage can reach even the 10% of the contract value in certain cases.