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Arizona bid bonds

Arizona Bid Bonds

Arizona Bid Bonds

Arizona Bid Bonds – When a contractor submits a request for a bid bond to its surety professional, there is a form that needs to be completed or information that is required. A partial list includes bid date, obligee name, bid bond %, bid amount, liquidated damages, warranty period, completion time, description of work, estimated profit, is there a required bid bond form? etc.

 

Why does the surety want and need this information in order to make a decision?

 

As described above, if the surety company issues the bid bond, it has prequalified the contractor; that is the surety company plans to write the performance and payment bond if the contractor is the awarded bidder. And remember, the performance bond is the guarantee to the public entity that the contractor will fulfill its obligations.  The surety would only make such a guaranty if it knew what it was bonding. Therefore, the surety needs to know what those responsibilities will be such as completion time, type of work, liquidated damages, etc.

 

Who Requires the Bid Bond and Why Is It Needed?

 

A bid bond is a type of contract surety bond required by contractors when they are submitting proposals for construction projects. The bond helps provide a guarantee to the project owner that the winning bidder has the intent and wherewithal to undertake the contract under agreed upon terms. If the contractor defaults on this promise, the project owner may file a claim to recover the cost differential associated with accepting a secondary bid.

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