A bid bond is issued as part of a bidding process by the surety to the project owner, to guarantee that the winning bidder will undertake the contract under the terms at which they bid.[1]
The cash deposit 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.[2] The bid bond assures and guarantees that should the bidder be successful, the bidder will execute the contract and provide the required surety bonds.