An insurance agreement, accompanied by a monetary commitment, by which a third party (the surety) accepts liability and guarantees that the bidder will not withdraw the bid, the bidder will furnish bonds as required, and if the contract is awarded to the bonded (insured) bidder, the bidder will accept the contract as bid, or else the surety will pay a specific amount. Also, bid guarantee.
Sometimes required by a developer from a contractor submitting the lowest bid on a project. If the contractor subsequently refuses to undertake the project, then the bid bond will pay the developer the difference between the lowest and the next lowest bid. Its aim is to ensure contractors make serious bids.
A pledge from a surety to pay the bond amount to the owner in the event the Bidder defaults on its commitment to enter into a contract to perform the Work described in the Bid Documents for the bid price
When an exporter is bidding on a foreign contract, a bid bond guarantees that the exporter will take the contract if the bid succeeds. An exporter who refuses the contract must pay a penalty equal to the amount of the bond.
A bond intended to guarantee that the bidder on a construction, supply or service contract will enter into the contract if successful as a bidder. Should the bidder fail to enter the contract, the surety on the bid bond may be called upon to pay the difference between the amount of the principal's bid and the bid of the next lowest qualified bidder.
When an exporter is bidding on a foreign contract, a bid bond guarantees that the exporter will take the contract if it is awarded. If the exporter fails to take the contract, it will have to pay a penalty in the amount of the bond. A bid bond is usually requested by a foreign organization to screen out weak contenders. Your financial institution or the Export Development Corporation can assist in financing and issuing these bonds.
An obligation undertaken by a bidder promising that the bidder will, if awarded the contract within the time stipulated, enter into the contract and furnish the prescribed performance and payment bond(s).
An insurance agreement in which a third party agrees to be liable to pay a certain amount of money in the event a bidder fails to sign a contract as bid or as mutually agreed upon presentation of that contract to the bidder.
An agreement in which a third party agrees to be liable in the event the bidder fails to sign the contract as bid (if his bid is accepted). A bid deposit is similar, but the bidder must deposit cash or a certified check.
A bond issued by a surety on behalf of a contractor that provides assurance to the recipient of the contractor's bid that, if the bid is accepted, the contractor will execute a contract and provide a performance bond. Under the bond, the surety is obligated to pay the recipient of the bid the difference between the contractor's bid and the bid of the next lowest responsible bidder if the bid is accepted and the contractor fails to execute a contract or to provide a performance bond.
Guaranty in the amount of 5 percent of the contractor's total bid amount. If the contractor withdraws a bid without just cause, a claim is filed against a contractor's bid bond. Just cause is limited to clerical errors. Bid bonds act as deterrents against contractors submitting and then withdrawing bids. Bid bonds also reimburse Mn/DOT for costs related to re-advertising the project and delays in the project start date.
Guarantees an owner, the "obligee," that the accepted contractor will actually undertake the work and that the contractor will furnish performance, payment, and, perhaps, maintenance bonds — or that the contractor will pay the owner the difference between the amount of the contractor's accepted bid and the bid of another contractor who has to be called in to complete the project.
Given by a bidder for a supply or construction contract to guarantee that the bidder, if awarded the contract within the time stipulated, will enter into the contract and furnish the prescribed performance bond. Default will ordinarily result in liability for the difference between the amount of the principal's bid and the bid of the next low bidder who can qualify for the contract. In any event, however, the liability of the surety is limited to the bid bond penalty.
A bid bond is an obligation undertaken by the bidder promising that the bidder will, if awarded the contract, enter into the contract and furnish the prescribed payment and performance bond(s) within a specified period of time.
A bond issued by a surety company to provide assurance that the contractor submitting the bid has the ability to execute a contract and complete the scope of work. The bond is defaulted if the contrator fails to execute a contract - the amount of the bond is used to pay the difference to the next lowest bidder.
A bid bond is given by a bidder for a construction contract to guarantee that the bidder, if awarded the contract within the time stipulated, will enter into the contract and furnish any performance and payment bonds that may be required
A financial guaranty issued by a surety company in favor of a buyer, at the request of a potential seller, assuring the buyer of the intent and contractual competence of the seller submitting a tender. Compare "Tender Bond."