What a bid bond is
A bid bond is a guarantee you submit with your bid. It tells the project owner that if you win, you'll sign the contract at your bid price and provide the performance and payment bonds the contract requires. If you walk away, the surety pays the owner's loss up to the bond amount, and you repay the surety.
In Illinois
On Illinois Department of Transportation road and bridge lettings, each bid must include a proposal guaranty under Article 102.09 of IDOT's Standard Specifications: a bid bond on the department's form, or a cashier's or certified check. The bid bond is for 5% of the total bid price, or the lower amount in the Article 102.09 schedule.
- Local agencies using IDOT specifications (for example DuPage County) also require a bid bond or check, which is forfeited if the low bidder does not sign the contract and furnish the contract bond.
You need this bond if you're
- A general contractor bidding public works
- A subcontractor whose general contractor asks for bid security
- A contractor bidding a private job where the owner asks for one
- A design-build team bidding a public project
What the surety looks at
Your business details, credit, experience and the job you're bidding. Larger jobs can also need financial statements and a list of work in progress.