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 Ohio
Ohio requires every bidder on a state or political subdivision public improvement contract to file a bid guaranty with the bid, under R.C. 153.54. It is either a bond for the full amount of the bid or a check or letter of credit for 10 percent.
- If the bidder fails to sign the contract, the bidder and surety owe the difference to the next lowest bidder, up to a penal sum of 10 percent of the 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.