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Form 131084(0116)BID BOND KNOW ALL PERSONS BY THESE PRESENTS: That we, (Bidders Name)of(City, State)as principal, and the of(Surety)as Surety, are held and firmly bound unto the Iowa Department of(Address)Transportation.
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Assigns FAQ
For example, a contractor that is making a $250,000 bid to provide roofing for an elementary school will have to submit a bid bond of $50,000. This bid bond is required along with a proposal to be taken seriously as a contender for a federal contract.
There are two types of bid securities: bid bonds and performance bonds. Bid bonds are a type of surety bond that is required in order to submit a bid on a construction project.
The bid bond guarantees the developer that if the principle is awarded the job, he or she will fulfill the terms of the contract including obtaining any other bond requirements such as a performance bond and a payment bond.
Typically a bid bond is 10% of the contract price, but that isn't mandatory. Some owners will ask for 5%, a fixed dollar amount or any amount they think is worthy. The idea behind the bid bond is that the owner can recover the difference between low and second lowest bidder, and it provides a prequalification function.
For example, a client issues a contractor a performance bond. If the contractor is not able to follow the agreed specifications in constructing the building, the client is given monetary compensation for the losses and damages the contractor may have caused.
Jointly Related content
Proposal Guaranty Changes - Iowa DOT
Individual bid bonds, Form 131084 518003, must be submitted using the electronic bid bond...
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