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 Wisconsin
Bids on Wisconsin state building projects let by the Department of Administration, Division of Facilities Development, need a bid bond under Wis. Stat. § 16.855(2)(b)1. The state bid bond form sets the penal sum at 10 percent of the total bid. Cities and other local bodies set bid security in their own bid documents.
- The DFD bid bond also guarantees that the winning bidder delivers a separate 100 percent performance bond and a 100 percent payment bond.
- City bid documents commonly ask for a bid bond or certified check of at least 5 percent of the bid, for example the City of Madison.
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.