Because bid bonds as small, usually 2.5% to 10% of the total project proposal, it would seem simple for a surety company to just just charge a fee and issue them. So why don’t we write them freely? The answer is in the nature of the bid bond obligation. A bid bond is a guarantee that IF you are the winning bidder on the project that the surety WILL replace the bid bond with the appropriate payment and performance bonds or forfeit the bid bond amount. We must assume that you are submitting reasonable bids and will therefore likely be a winner. We must qualify you for the performance/payment bond package, NOT the bid bond amount. So as an example, while you may qualify for $25,000 in surety credit, you may not qualify for $250,000.
Caught in a time crunch to submit a bid bond? We are fast, and we have alternative collateralization options for same day issue bonds.
