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 Michigan
Michigan has no general statute setting a bid bond amount. The Michigan Department of Transportation's Standard Specifications for Construction require a bid guaranty on its contracts, and many Michigan counties and cities that use those specifications ask for a bid bond or certified check, often 5% of the bid.
- The bid documents for each letting state the amount and the accepted forms of bid security.
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.