CA Bid Bond Guide
A CA bid bond protects owners by guaranteeing that the low bidder will enter the contract and obtain required performance and payment bonds. This concise, action‑focused guide explains what bid bonds cover, why owners require them, real examples, application steps, common pitfalls, and fast next steps contractors can take to win public and large private bids.
CA bid bond
A CA bid bond is a three‑party promise (owner, contractor, surety) that the bidder will honor the bid and, if awarded, post performance and payment bonds. If the low bidder refuses to execute, the bid bond compensates the owner for the cost difference up to the bond penalty.
California bid bond
Public owners in California commonly require bid bonds on public works solicitations and many large private projects. Typical public thresholds and percentages vary by agency; read the solicitation carefully for the obligee name, exact amount, and acceptable bond forms.
Bid bond CA
Most bid bonds are expressed as a percent of the bid (commonly 5%–10%). The bond limits the owner’s exposure when the successful bidder cannot or will not proceed, and it filters out unserious bidders during procurement.
Bid bond for contractors
Prime contractors must have a reliable surety relationship and a standard bid packet: financials, license, insurance proof, references, and a capacity letter. For joint ventures, include the JV agreement and each partner’s financials.
How to get bid bond
Contact a surety broker or agent early.
Provide recent financials, current backlog, license and insurance.
Request a bid bond form acceptable to the obligee.
Deliver the executed bond with your bid and keep the original with the contact team.
Bid bond requirements
Read the solicitation for required bond amount, delivery format, and submission deadline. Common disqualifiers: wrong obligee name, incorrect bond percentage, unsigned surety forms, or late delivery.
Public works bid bond
Public projects often have stricter bond requirements and set minimum bonding percentages. Ensure your surety is approved by the agency and confirm any additional forms (e.g., small business affidavits) required with the bond.
Bid bond amounts
Agencies typically set bid bond amounts as a percentage of base bid. Check variable bid items and alternates—some solicitations require bond coverage based on total possible contract value, not just low‑bid line items.
Bid bond application
Prepare a single, consistent bid packet you can reuse: 2 years of financials, bank references, balance sheet, insurance certificates, license copy, and a one‑page claims history. This shortens underwriter review and speeds issuance.
Bid bond examples
Example 1: Municipal road project required a 10% bid bond; the low bidder failed to obtain performance bonds, and the owner claimed the bid bond to cover re‑procurement costs. Example 2: A school renovation accepted a certified bid bond form and rejected a personal check offered in its place—resulting in disqualification.
Practical Tips For Contractors Keep a trusted surety broker on speed dial. Assemble a reusable bid packet. Confirm acceptable bond forms and delivery instructions before bid day. If your financials show fluctuations or past claims, disclose them proactively—transparency speeds approval.
Common Pitfalls To Avoid Submitting an unsigned surety signature page, using the wrong obligee name, underestimating required bond percentages, or leaving bond requests to the last minute can cost you the job.
After You Win With A Bid Bond If awarded, immediately secure performance and payment bonds per contract terms. If you cannot obtain those bonds, notify your surety—failure to do so may trigger a bid bond claim and significant financial exposure.
Quick Action Steps
Review solicitation bonding language now.
Contact your surety broker and confirm bond form and timing.
Attach your bond packet to the bid and retain originals for follow‑up.