Planning & EstimatingQuestion 621 of 700
What is the purpose of a bid bond?
a.It guarantees that, if awarded, the bidder will enter into the contract and furnish the required performance and payment bonds; if not, the surety compensates the owner.
b.It guarantees the project will be completed on schedule.
c.It guarantees that subcontractors and suppliers will be paid.
d.It authorizes the release of retention at substantial completion.
Explanation
Correct: a bid bond protects the owner if the low bidder refuses to sign the contract or provide the required bonds, covering the extra cost of awarding to the next bidder. Guaranteeing completion is the performance bond's role. Guaranteeing payment to subs and suppliers is the payment bond's role. Retention release is a payment-application matter, not a bond function.
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