Bid Bond
Get bid bonds to compete on federal, state, and local construction projects; bid bond requirements depend on the project and its solicitation. Often FREE for qualified contractors with performance and payment bonds. No payment required until your bond is issued.
Get Your Bid Bond
Include your bid due date so your agent can plan around it
What helps your agent quote
- Bid amount and bid due date
- Project owner (obligee) and the required bond form, if you have it
- Your company’s legal name and the project state
- For larger contracts, the carrier may ask for financial statements and a work-in-progress schedule
You can start without every document. No payment is needed to request a quote.
What helps your agent quote
- Bid amount and bid due date
- Project owner (obligee) and the required bond form, if you have it
- Your company’s legal name and the project state
- For larger contracts, the carrier may ask for financial statements and a work-in-progress schedule
You can start without every document. No payment is needed to request a quote.
- Who requires it: The project owner: federal agencies, states and municipalities that take sealed bids.
- Amount: 20% of the bid amount on federal contracts, up to $3 million; typically 5-10% of the bid on state and local projects.
- Typical cost (estimate): often free for qualified contractors that also buy performance and payment bonds (the carrier decides). If charged separately, typically $50-$100 per bond. The surety sets the final price.
- Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
Official Federal Requirements
"The bid guarantee amount shall be at least 20 percent of the bid price but shall not exceed $3 million."Federal Acquisition Regulation (FAR) • FAR 28.101-2
How Bid Bond Amounts Are Calculated: A Bid Bond Example
Federal bid bonds must be at least 20% of the bid price, capped at $3 million (FAR 28.101-2). State and municipal projects typically require 5-10%.
The bid bond amount is not what you pay—it is the maximum the surety will cover if you fail to honor your bid. For cost details, see our surety bond cost guide or use the bid bond calculator.
What Is a Bid Bond? Bid Bonds Explained for Contractors
A bid bond is a type of contract bond that guarantees a contractor will honor their bid if awarded the project and will provide the required performance and payment bonds. It is the first bond in the three-bond sequence required on most public construction projects. Understanding what a surety bond is helps clarify the three-party relationship: the project owner (obligee), the contractor (principal), and the surety company (guarantor). The short bid bond definition: the surety backs the contractor’s promise to the project owner to honor the bid and, if awarded the project, to provide the required performance and payment bonds.
Unlike insurance policies where the insured is protected, a bid bond protects the project owner. If a winning bidder withdraws or cannot provide the required bonds, the surety pays the owner the difference between the winning bid and the next lowest bid—up to the bid bond amount. This eliminates the risk of frivolous bids and ensures only serious, capable contractors compete for public work.
You may also see bid bonds referred to as proposal bonds — the terms are interchangeable, with usage varying by jurisdiction and contract type. See our bid bond vs proposal bond guide for the full terminology breakdown.
Bid Bonds for Construction: Miller Act & State Requirements
The federal Miller Act requires performance and payment bonds for federal construction contracts exceeding $150,000 (FAR 28.102-1). A bid bond is required, except as provided in FAR 28.101-1(c), whenever a performance bond or a performance and payment bond is required (FAR 28.101-1). State "Little Miller Acts" impose similar requirements with varying thresholds. For the complete process, see how to get a surety bond.
Federal Contracts
State Projects
Municipal
State Bid Bond Thresholds at a Glance
Every state's Little Miller Act sets its own bonding thresholds. Many states that require contractor license bonds also mandate bid bonds for public projects.
Low Threshold
- California — $25,000
- Texas — $25,000
- Arizona — $0 (all projects)
Mid Threshold
- Florida — $100,000
- New York — $100,000
- Colorado — $150,000
High Threshold
- Indiana — $200,000
- New Jersey — $200,000
- Virginia — $500,000
How Does a Bid Bond Work?
The first step in construction project bonding
Submit Bid with Bond
Include a bid bond with your proposal. The bond guarantees you'll honor your bid if selected.
Win the Contract
If you're the winning bidder, you must enter into the contract at your bid price.
Provide P&P Bonds
After winning, you'll need to provide performance and payment bonds before work begins.
After winning, the bid bond is released and replaced by P&P bonds (performance and payment bonds). For the basics, see our guide: what is a P&P bond. For a walkthrough of the full bonding process, see our guide on how to get a surety bond.
Bid Bond Cost
Bid bonds are one of the most affordable surety bonds available. For qualified contractors who also purchase performance and payment bonds, some carriers provide bid bonds at little or no cost (the carrier decides), because the bid bond is a commitment to provide the P&P bonds if the contractor wins.
When purchased separately (less common), bid bonds typically cost $50-$100 regardless of project size. For detailed cost breakdowns across all surety bond types, visit our cost center. You can also use the bid bond calculator for a quick estimate.
Contracting in California, Texas or Florida?
California
California contractors need a $25,000 CSLB license bond (Bus. & Prof. Code 7071.6) before the license issues. Public jobs add performance and payment bonds on top.
Texas
Texas has no statewide contractor license bond, but public works contracts over the statutory threshold require performance and payment bonds under Gov. Code Chapter 2253.
Florida
Florida's DBPR contractor license bond ($10,000 to $20,000) applies mainly to applicants with a credit score below 660, so many contractors need none. Public projects require performance and payment bonds under F.S. 255.05.
Every contract bond starts with a license bond
Most states require a contractor license bond before you can bid. Fast-growing construction markets:
More on bid bonds
Frequently Asked Questions
Common questions about bid bonds
What is a bid bond?
How much does a bid bond cost?
What is the bid bond amount?
What does a bid bond company need, and how fast can I get a bid bond?
Does your entity require bonding to bid on contracts?
Do I need a bid bond for Texas construction projects?
Bid bond purpose: what is a bid bond used for?
Are bid bonds low risk for sureties?
Bid bond insurance: is a bid bond the same as insurance?
What happens if I win the bid but can't perform?
What happens after I submit a bid bond application?
State Contractor Bonds
License bonds required before bidding in many states
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
Ready to Win More Contracts?
Get bid bonds to compete on federal, state, and local projects. Often free for qualified contractors when bundled with performance and payment bonds. You never pay until your bond is issued.