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Bid Bonds or Letter of Intent

A Bid Bond is purchased when a contractor, or the ‘principal, is bidding on a tendered contract with public authorities and or private owners.

The Bid Bond prequalifies the principal and provides the necessary security to the owner or general contractor, necessitating a guarantee that the principal will enter into the contract if it is awarded. In essence, it provides a guarantee that the Bidder (Constructor), if awarded the contract will enter into the said agreement and furnish the prescribed Performance Bond.

A cash deposit is required which is subject to full or partial forfeiture if the winning contractor fails to either execute the contract or provide the required performance and/or Payment Bonds.