BID BONDS

BID BOND

American Surety Bonds Agency helps contractors secure bid bonds for public and private construction bids nationwide. Because requirements vary by obligee, project, and bid specifications, our underwriting team reviews your bid documents and financial profile before determining your bond amount and next steps.

This is a type of contract bond that many project owners (obligees) require as part of the bidding process on public and private construction contracts. It guarantees that if the bidder is awarded the contract, the bidder will execute the contract and furnish the required payment and performance bonds within the time specified in the bid documents. This bond does not guarantee the quality, cost, or completion of the work — it guarantees the specific obligation stated in the bond form or bid specifications: that the winning bidder will honor its bid.

On federal contracts, this requirement is commonly called a “bid guarantee” under FAR 52.228-1, and is often set at a stated percentage of the bid price. On private projects, the standard AIA Document A310 Bid Bond serves the same function. The bond amounts are typically 5%, 10%, or 20% of the total bid, though underwriting reviews the full bid amount to confirm the bidder can obtain payment and performance bonds for the complete contract price if awarded the job.

This bond goes by several names depending on the obligee or the governing contract form. You may also see it called:

• Bid Guarantee
• Bid Guaranty
• Bid Security
• Proposal Bond

These all refer to the same bond described on this page — the terminology differs by obligee and contract type, not by bond function.

Many project owners and government agencies require this bond as part of the bidding process on public and private construction contracts. The required form and amount depend on the obligee, the project, and the applicable procurement rules.

This bond may serve several purposes, including:

• Guaranteeing the project owner (obligee) that the winning bidder will execute the contract if awarded
• Meeting a bid guarantee requirement under FAR 52.228-1 on many federal construction contracts
• Meeting a bid bond requirement stated in AIA Document A310 or another standard bid form used on private projects
• Protecting the obligee from the cost of re-bidding or accepting a higher bid if the low bidder walks away

Your bid specifications or invitation to bid will state whether this bond is required. American Surety Bonds Agency assists with the bond application and underwriting process.

These bonds are underwritten individually. Depending on the bid, the underwriter may request:

• A completed bid bond application
• A copy of the contract or bid specifications
• The bid amount and the required bond percentage, if stated
• A job cost breakdown
• Personal and business financial statements, if applicable
• Information about total work on hand and previous project experience

You can apply either way: the Fast Track application for bids under $250,000, or the Bond Kit for contracts of any size or scope. After reviewing your application, the underwriter may request additional supporting financial or project documents, and will advise if any further underwriting requirements apply.

If your bid specifications also require a payment and performance bond, your bond is free — we’re able to offer it at no cost as part of handling your full bonding needs if you’re awarded the contract. If a payment and performance bond isn’t required, the bond costs 0.5% of the contract amount, including any change orders.

Obtaining your bond through American Surety Bonds Agency is simple:

1. Complete the online application — our Fast Track application for bids under $250,000, or the Bond Kit for of any project size or scope.
2. Our underwriting team reviews your bid documents, financial information, and project history.
3. Once approved, confirm your bond is free or review your flat fee, then finalize your bond.
4. Receive your completed bond to submit with your bid.

American Surety Bonds Agency has been helping contractors meet their bid bond requirements for decades. Whether you’re bidding on your first public contract or scaling up for a busy bid season, our experienced team is here to make the process simple and efficient.

When you choose American Surety Bonds Agency, you’ll receive:

• Experienced surety bond professionals
• Competitive rates from leading surety companies
• Fast underwriting and responsive customer service
• A secure online application process
• Assistance throughout the bonding process

Above all, we’re committed to helping you meet your bid requirement quickly and correctly, with experienced guidance every step of the way.

Contact American Surety Bonds Agency toll-free at (877) 201-8976 or our Atlanta office at (404) 486-2355. Our team can answer questions about your specific bid and project details and walk you through the application process.