A bid bond is a form of bond which may be required in order for a contractor to submit a
bid under a public tender. In some cases a formal bond is to be issued by a surety
company, typically in an amount of 5% or 10% of the expected contract amount. In other
cases there may be the option of a surety company issued bid bond or a cash bond. In a
few cases, only a cash bond may be acceptable.
In addition to a bid bond and/or as a substitute for a bid bond, some tenders may require a
letter from the surety company consenting to provide performance bonding should the
tenderer be successful in its bid.