Bid Bond to Performance Bond: The Award-Day Handoff
Your bid bond doesn't become your performance bond — it expires, and a brand-new bond takes its place, usually within about 10 days of Notice of Award. That window is the single riskiest stretch in the entire bonding process, and almost nothing online walks through it in order: what a consent-of-surety letter actually promises, why a low- or no-cost bid bond turns into a real premium overnight, and exactly what it costs you in dollars if the final bonds don't land in time.
Statutes verified against 40 U.S.C. §3131, 40 U.S.C. §3132, FAR 28.101-1, and FAR 28.102-1 as of August 4, 2026. Figures cross-checked against this site's bid bond and performance bond hub pages to avoid conflicting numbers.
- Who requires it: The contracting officer or public owner that awarded the contract.
- Amount: The performance bond is sized to the awarded contract price, not to the bid bond percentage.
- Typical cost (estimate): The page shows the move from $0 on the bid bond to 0.5-3% for the final bond premium. The surety sets the final price.
Award Week, Day by Day
Most guides describe the bid-to-award handoff as one abstract step. It isn't — it's a countdown with a hard legal deadline attached. Here's what actually happens on each day, using the federal default window as the reference point.
Bid opening
Your bid bond is live, everyone else's is too
Every responsive bidder posted a bid guarantee. Yours cost you nothing; it just promises you'll sign and bond up if you win.
Day 0 — Notice of Award
The clock starts now, not when paperwork catches up
The contracting officer notifies you in writing. Losing bidders start getting their bid guarantees released "as soon as practicable." Yours is now on a deadline instead. Call your surety agent today — not after you've signed the contract.
Days 1-9 — The furnishing window
Underwriting the real bond, not the placeholder one
Your surety prices and issues a performance bond (and, on contracts over $150,000, a payment bond) sized to the actual awarded contract price — not your bid bond's percentage. If the contract value shifted at negotiation, this is where that shows up in the number.
Day 10 (or your stated deadline)
Execute the contract and furnish the bonds — together
FAR 52.228-1 ties contract execution and bond delivery to the same deadline. Your bid bond is discharged the moment the new bonds are accepted — it never runs alongside them.
After delivery — Notice to Proceed
Work starts under the final bonds, not the bid bond
From here forward, the performance bond covers completion and the payment bond covers subs and suppliers, for the life of the contract plus any warranty period.
Miss the deadline instead and the sequence above breaks at Day 10 — see the forfeiture math further down this page for what that costs.
Two Different Documents Are Both Called "Consent of Surety"
This is the single most common mix-up in award week, and it matters — a contracting officer asking for "consent of surety" in your bid instructions may mean either one below.
The Bid-Stage Consent Letter
Also called an "agreement to bond," this is submitted with or shortly after your bid. It's the surety putting in writing that it will furnish your performance and payment bonds if you're the awardee — before those bonds exist. Many public owners require it as extra assurance that a low bid is actually bondable, not just cheap.
- Issued by the surety alone — you don't sign it
- Confirms bonding capacity exists before award, reducing the odds of a Day-10 scramble
SF 1414, Consent of Surety
A specific federal form used later, after your performance bond is already on file. When the contract is modified — a price change, a novation, added scope — the surety uses SF 1414 to formally acknowledge that its existing bond still covers the contract as amended.
- Governed by FAR 28.106-5; the form itself is authorized under FAR 53.228
- Has nothing to do with the initial bid-to-final-bond handoff on this page
If your bid documents mention "consent of surety" before you've even been awarded, they almost always mean the first one. If your obligee mentions it after your bonds are filed and the contract changes, they mean SF 1414.
Why Your Bid Bond Was Cheap and Your Performance Bond Isn't
Contractors are frequently surprised that a low- or no-cost bid bond is followed a week later by an invoice. The two bonds aren't priced the same way, and the exposure isn't the same size.
Bid bond: often little or no cost
Your surety already qualified you for the performance-bond capacity before issuing the bid bond — the underwriting work was done in advance. The bid bond itself only has to cover the gap between your bid and a re-procurement cost, which is a small, low-probability exposure. Some carriers charge little or no separate premium for that risk on a qualified account; the carrier decides.
Final bonds: 0.5%-3%+ of contract price
The performance bond covers the surety completing your entire contract if you can't — full value, full duration, full risk. That's a real, ongoing underwriting exposure, priced against your credit, financials, and experience, and due at or before execution — not deferred to project completion.
Performance Bond Premium by Credit Tier
Based on a $2,000,000 contract bond amount
- 750+ (Excellent)Rate: 0.5-1.5%$10,000-$30,000
- 700-749 (Good)Rate: 1-2%$20,000-$40,000
- 650-699 (Fair)Rate: 2-3%$40,000-$60,000
- Below 650Rate: 3-8%+$60,000-$160,000
Same $2,000,000 contract used in the forfeiture example below, so the two sections read as one worked scenario rather than two disconnected figures. Rates vary by contractor financials and project type.
The Forfeiture Math If You Can't Deliver
Every guide mentions "the government can terminate for default." Almost none show the actual dollar mechanics. Here they are, worked through on the same $2,000,000 contract used above.
What You Owe If the Final Bonds Don't Land in Time
Per FAR 52.228-1 and FAR Part 49: the contracting officer can terminate for default and re-procure the work; you're liable for the government's excess cost of completion, and your bid guarantee is applied first against that shortfall.
Your bid bond absorbs the hit first
On a $2,000,000 bid with a 10% bid bond, your penal sum is $200,000. The $150,000 excess cost above comes out of that penal sum first — you're not automatically out the full $200,000, but you have zero cushion left if the re-award gap is larger, or if the government adds legitimate re-procurement expenses on top.
A wider gap costs you personally
If the re-award gap exceeds your bid bond's penal sum — say a $2,400,000 re-award against the same $2,000,000 bid — the bid bond covers the first $200,000 and you're personally liable for the remaining $200,000. This is the scenario sureties are underwriting against before they ever issue your bid bond in the first place.
The Statutes and FAR Sections Behind Every Number Above
Not a paraphrase — these are the exact provisions this page's figures come from.
Official Federal Requirements
"Before any contract of more than $100,000 is awarded for the construction, alteration, or repair of any public building or public work of the Federal Government, a person must furnish to the Government the following bonds, which become binding when the contract is awarded: (1) A performance bond... (2) A payment bond... The amount of the payment bond shall not be less than the amount of the performance bond."40 U.S.C. §3131(b) — the Miller Act • 40 U.S.C. §3131(b)
Official Federal Requirements
"The Federal Acquisition Regulation shall provide alternatives to payment bonds as payment protections for suppliers of labor and materials under contracts referred to in section 3131(a) of this title that are more than $25,000 and not more than $100,000."40 U.S.C. §3132(a) • 40 U.S.C. §3132(a)
Official Federal Requirements
"A contracting officer shall not require a bid guarantee unless a performance bond or a performance and payment bond is also required... bid guarantees shall be required whenever a performance bond or a performance and payment bond is required."Federal Acquisition Regulation — Acquisition.gov • FAR 28.101-1
Official Federal Requirements
"Contracting officers shall require performance and payment bonds... only for construction contracts exceeding $150,000, except that for contracts within the $35,000 to $150,000 range, the contracting officer shall select two or more alternative payment protections."Federal Acquisition Regulation — Acquisition.gov • FAR 28.102-1
Note the deliberate gap between the statutory $100,000 trigger in 40 U.S.C. §3131(b) and the $150,000 figure FAR 28.102-1 currently applies — FAR periodically adjusts the operative threshold upward; the underlying statute has not been amended to match. External links use rel="nofollow noopener noreferrer" and open the official U.S. Code or Acquisition.gov source directly.
Your Award-Week Checklist
What to have ready the same day Notice of Award lands, so the 10-day window doesn't become a 10-day scramble.
Call your surety agent immediately
Don't wait for the signed contract to arrive. Notify your agent the day you receive Notice of Award — underwriting the final bonds takes time your 10-day window doesn't have to spare.
Confirm the exact deadline in your award letter
10 days is the federal planning default (FAR 52.228-1). Your specific solicitation, or a state/local Little Miller Act contract, may set a different number — read the actual letter.
Verify the final contract price with your surety
If negotiations, alternates, or a best-and-final-offer round changed the number since you bid, your performance bond penal sum is based on the awarded price, not your original bid.
Confirm your Power of Attorney is current
The agent signing your bond needs an unexpired, matching POA on file with the surety — an expired or mismatched POA is a common last-minute holdup.
Check which bond forms the obligee requires
Federal construction contracts over $150,000 typically require SF 25 (Performance) and SF 25A (Payment) — AIA forms are generally not acceptable on federal work. Confirm before your agent prepares the wrong forms.
Have your indemnity agreement and premium payment ready
Final bonds carry a real premium due at or before execution, unlike your bid bond. Know your payment method in advance so it isn't the thing holding up delivery on day 9.
Just got your Notice of Award?
Tell us your award date and contract value — we'll get your final bond underwriting moving today, not after your window closes.
Start your final bond quoteQuestions About the Award-Week Handoff
The core mechanics are covered in the timeline above. These questions go into the edge cases contractors actually run into during the 10-day window.
Does my bid bond surety automatically become my performance bond surety?
What exactly is a 'consent of surety' letter, and do I need one?
How many days do I actually have to deliver the final bonds after award?
My contract value changed between my bid and the award — do my bonds change too?
What happens in dollars if I can't get the final bonds issued in time?
Can I ask for more time if my surety needs longer to underwrite the final bonds?
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
Related coverage on this site
This page covers the handoff moment specifically. For the bonds themselves, start with the hub pages below.
Cost (1-3%), Miller Act rules & fast quotes
What a bid bond guarantees and typical penal sums
One application for both final bonds
Keep Reading
Don't let a 10-day window turn into a default termination
The contractors who miss the deadline almost never do it because their surety said no — they do it because they waited to make the call. Start yours today.
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