Public WorksQuestion 1590 of 1632

On a public works project, a 'bid bond' submitted with a contractor's bid primarily guarantees that:

a.The finished work will be free of defects for one year
b.The subcontractors listed in the bid are registered with the DIR
c.The workers on the job will be paid the prevailing wage
d.The bidder will sign the contract and post the required bonds

Explanation

A bid bond guarantees only that the successful bidder will execute the contract and post the payment and performance bonds the call for bids requires; if it walks away, the surety covers the agency's cost of going to the next bidder. Freedom from defects is what a maintenance or warranty bond promises. Prevailing wage payment is backed by the payment bond and by §1726 withholding, not by the bid bond. DIR registration of listed subs is verified from the bid itself, and no bond guarantees it.

Law Reference: Public Contract Code §20170; Civil Code §9550

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