The Bid bonds are necessary for contracts; It guarantees that the project owners can be accomplished according to the construction agreement provision. The bid bond required of a contractor submitting the lowest bid on a project. A bid bond is a guarantee that you provide to the project owner stating that you have the capability to take on and implement the project once you are selected during the bidding process. The purpose of a bid bond is to afford protection against a change involving substantial damages, loss or detriment by the party soliciting the bids.
Construction company owners are responsible for not only choosing a lowest bidder, but to protecting themselves should the firm back out before the job is done. The bid bond prevent contractors from exerting political influence to force a favorable decision by government employees.
The Client may require you to provide a bind bond with your tender submission. The amount of a bid bond is usually stated as a percentage of the export contract value, for example 5 or 10 per cent. The three parties are involving the tender bond processing, project owner, contractor and financial institution. A bank or other financial institution can issue a tender bond to your prospective buyer on your behalf. Tender or bid bond sample Download