What Is the Difference Between a General Bid Bond & a Separate Bid Bond?
A general bid bond is a guarantee from a contractor that details how the company will do the job that it is bidding for if awarded the contract. The general bid bond is part of a construction bid process.
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Protection
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The general bid bond protects the company that is soliciting bids against the possibility that the contractor chosen will be unable to perform the stated work. It encourages contractors to ensure that their bids are 100 percent valid. There is no financial gain for the project owner.
Formal Bid Opening
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The usual amount of the bid bond is between 10 and 20 percent of the total project bid and must be submitted at the same time as the bid. If the bid opening is in a formal setting, then the bond must be submitted separately from the bid in envelopes that clearly state the contents of each envelope. If the bond is not separate, than the bid will be rejected without being opened.
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Informal Bid Opening
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In an informal bid opening, there is no separate bid bond and the general bid bond and the bid are in the same envelope and will be opened together.
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References
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