Ensure bidders honor their commitments if selected
Bid or Tender Bond
A type of surety bond commonly used in construction and procurement projects to ensure that the contractor (the bidder) will honour their bid, and if awarded the contract, will follow through by signing the contract and providing required performance and payment bonds. A bid bond protects the project owner (obligee) by providing financial assurance that the winning bidder will accept the job if selected and provide a performance bond if required.
Key Benefits
Bidder commitment assurance
Protection against bid withdrawal
Contract signing guarantee
Performance bond provision
Financial security for owners
Competitive bidding integrity
Reduced procurement risk
Common Use Cases
- • Construction tenders
- • Government procurement
- • Large commercial projects
- • Public infrastructure bids
How It Works
Step 1: Bid Submission
Bidder submits tender with bid bond
Step 2: Contract Award
Winning bidder must accept and sign contract
Step 3: Bond Conversion
Bid bond replaced by performance bond upon acceptance
Target Audience
Government entities, project owners, contractors, procurement departments