Texas bid bonds are designed for competitive project bidding, such as in the construction industry. If a bid is offered to a contractor for a given project, for instance, a bid bond guarantees that the contractor will perform the work as outlined in the terms of the bid and according to the contract based on the bid.
Contractors in Texas get bid bonds because they’re inexpensive and don’t tie up cash or bank credit lines during the bidding process. Owners and general contractors also use bid bonds because they establish and confirm that the bidding contractor or supplier is qualified.
Texas bid bonds are initiated with a cash deposit, which contractors forfeit if they fail to perform according to the contracted terms. Winning bidders must also provide a performance and/or payment bond at their cost, which they will also forfeit in the event they do not execute their contract as agreed.
Bid bonds are FREE. Performance Bonds cost 3% of the total job with $0.00 hidden agency fees.
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