Certified Professional Public Buyer (CPPB) Practice Test

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What does a bid bond guarantee?

The bidder will accept the contract as bid
That the project will be completed on time
The bidder will provide insurance for the contract
The bidder will increase their bid if costs exceed expectations

The correct answer is: The bidder will accept the contract as bid

A bid bond serves as a guarantee from a bidder to a project owner that they will accept the contract if awarded. It acts as a financial assurance that the bidder, who has submitted a bid for a project, will not withdraw their bid once the bidding process concludes. If the bidder fails to honor this commitment, the project owner is entitled to claim the amount of the bid bond as compensation for the costs incurred in re-bidding the project or in selecting another contractor. Unlike some other forms of bonds, a bid bond does not guarantee the completion of the project, nor does it imply that the bidder will take on insurance for the contract. Additionally, it does not require the bidder to raise their bid in case of increased costs; rather, it focuses solely on the commitment to move forward with the project at the bid price if selected. This assurance helps project owners narrow down their choices and feel secure in their decision to award the contract to the chosen bidder.