Texas Bid Bond Guide
A Texas bid bond is a core procurement requirement on many public and large private projects. This short, high‑value guide explains what bid bonds do, who needs them, typical amounts, how to apply, common mistakes to avoid, and fast actions contractors can take to win bids and close the deal.
Texas bid bond
A bid bond is a three‑party guarantee (owner, contractor, surety) that the bidder will enter the contract and obtain required performance and payment bonds if awarded. If the low bidder refuses or cannot secure required bonds, the obligee may recover damages up to the bond penalty.
TX bid bond
Public agencies in Texas commonly set bid bond percentages and acceptable forms in solicitation documents. Private owners may also require bid bonds. Always read the solicitation to confirm obligee name, percentage, and delivery format before submitting your bid.
Bid bond Texas
Bid bonds usually equal a percent of the bid amount—commonly 5% to 10%—but agencies sometimes specify different thresholds. Understand whether alternates or allowances affect the base used to calculate the bond amount.
How to get bid bond
Contact a surety broker early and confirm the obligee accepts the surety you plan to use.
Provide 2 years of financials, current work backlog, license and insurance, and a one‑page claims history.
Request an obligee‑approved bid bond form and deliver the executed bond with the bid submission.
Bid bond for contractors
Prime contractors should maintain a ready bid packet: compiled financials, bank references, insurance certificates, contractor license, and a capacity letter from your surety. For joint ventures include the JV agreement and partner financials.
Public works bid bond
Public projects can have stricter rules: mandated bond percentages, approved surety lists, notarization or original bond delivery, and tight deadlines. Confirm whether electronic copies are allowed or an original paper bond must be hand‑delivered.
Bid bond requirements
Common disqualifiers include wrong obligee name, incorrect bond percentage, unsigned surety forms, or late delivery. Some solicitations accept certified checks or letters of credit instead — verify acceptable alternatives before bid day.
Bid bond amounts
Check whether the solicitation bases the bond on the base bid, total of alternates, or the maximum possible contract value. Misreading this detail can disqualify a bid or leave you under‑bonded.
Bid bond application
Prepare a reusable application packet. A consistent packet shortens underwriter review and lets your broker produce bid bonds quickly when an opportunity appears. Disclose material claims or financial anomalies upfront to avoid surprises.
Bid bond examples
Example 1: A county road project required a 10% bid bond. The low bidder couldn’t secure performance bonds; the owner claimed the bid bond to offset re‑procurement costs. Example 2: A school project rejected a bidder who submitted a personal check instead of an acceptable bid bond instrument.
Common pitfalls to avoid Keep your bid packet updated. Confirm the obligee name and bond percentage on every solicitation. Don’t rely on verbal exceptions — get written confirmation for any alternate instrument.
Practical next steps
Review solicitation bonding language now.
Call your surety broker and confirm acceptable bond form and timing.
Attach your bid packet and the executed bid bond to every submission.