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GOVERNMENT OF THE DISTRICT OF COLUMBIA PROPOSAL BOND (See Instructions on 2nd oa2e) PRINCIPAL (Legal Name and Address)SURETY(IES) (Name(s) and Address(BS))Date Bond Executed: (Must Not be Later Than.

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Bid Bond. It is a bond issued to serve as a guarantee to a project owner that the winning bidder will satisfy the terms of a tendered contract.

The bid percentage (usually five or ten percent 5, 10%) is forfeited if you don't accept the job. The Bid Bond prequalifies the principal and provides the necessary security to the owner or general contractor, or “obligee,” guaranteeing that the principal will enter into the contract, if it is awarded.

Typically, bid bonds are submitted as a cash deposit by contractors for a tendered bid. A contractor purchases a bid bond from a surety, which carries out extensive financial and background checks on a contractor before approving the bond. Several factors determine whether a contractor will be issued a bid 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.

A bid bond only covers the bid itself, ensuring that the contractor selected can follow through on the project while a performance bond only becomes necessary once a bid is won and a contract is awarded to the contractor.

A bid bond provides a guarantee that a winning bidder will take up the contract as per the terms at which they bid. A bid bond ensures compensation to the bond owner if the bidder fails to begin a project. Bid bonds are often used in construction jobs or other projects that follow a similar bid-based selection process.

For example, for a $500,000 bid, the contractor will have to secure a bid bond for $50,000. That $50,000 serves as a guarantee that the contractor will complete the project for the $500,000 bid value. Should the GC win the bid but not take the project, the owner can file a claim against the $50,000 bond.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232