Bonds, Insurance, & Liability
Section F-1
Bid Guarantee
When a Bid Guarantee is required, the Joint Committee recommends the following:
1. The Bid Guarantee should be in the form of a Bid Bond, certified check, or bank cashier's check. A specific amount should be noted for the bid guarantee rather than a percentage of the bid amount, and this guarantee should not exceed ten percent (10%) of the estimated amount of the base bid.
2. All bid guarantees not forfeited under the terms of the bidding, except for the two lowest responsible bidders, should be returned on or before the sixth day subsequent to the bid opening. If the contract is not awarded, the bid guarantees of the two lowest responsible bidders should be returned within forty-five (45) days subsequent to the bid opening, unless an extension is granted by those bidders.
3. It is recommended that bid bonds be provided as bid guarantees, but the bidder shall have the option of furnishing a check as noted above. If checks are mandatory as bid guarantees, and the contract bond is not executed within ten (10) days subsequent to the bid opening, the retained checks shall be exchanged for bid bonds at the option of the bidders.
4. If a bid bond is furnished, it should include a statement to the effect that if the Contractor is awarded the contract, the Surety Company will also provide the Contract Bonds required under the contract.
5. The name of the a specific Surety Company should not be specified in the requirements, nor should the Owner be permitted to require that only one Surety Company be allowed to supply the bonds.
6. Standard AIA contract documents should be used wherever possible.
Glossary Terms for the Best Practices Guide
History of Recommendation:
Reviewed March, 2011
Reviewed July, 2010
Revised May, 1987
Reviewed April, 1986
Reviewed June, 1977
Revised November, 1971
Approved March, 1968
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