Bids and Tenders
There are commonly two types of bonds that contractors are required to post when bidding for work. A Bid Bond guarantees that the Contractor will enter into a contract with the Owner for the amount of its bid, if successful, or the Surety will pay the difference between the Contractor’s bid price and the next lowest price, subject to amount of the bond. An Agreement to Bond is a commitment by the Surety to provide the Owner with Performance and Payment Bonds as required in the tender documents.
Final Contract Security — There are commonly two type of bonds that contractors are required to post as security for their contractual obligations. Performance Bonds guarantee the Contractor will perform its obligations to the Owner according the terms and conditions of the contract. Often accompanying Performance Bonds are Labour and Material Payment Bonds which offer payment protection to the Contractor’s subcontractors and suppliers;