A contractor in Nevada wants to bid on a public works project valued at $850,000. What is the minimum surety bond requirement under Nevada law?
Correct Answer
D) $850,000
Nevada public works projects typically require surety bonds equal to 100% of the contract amount, so an $850,000 project requires an $850,000 bond.
Why This Is the Correct Answer
Nevada law requires that surety (performance and payment) bonds on public works contracts equal 100% of the contract amount. For an $850,000 project, this means the contractor must provide an $850,000 surety bond. This protects the public owner and unpaid subcontractors/suppliers.
Why the Other Options Are Wrong
Option A: $1,700,000
$1,700,000 represents 200% of the contract amount. No Nevada statute requires double the contract value — this figure has no basis in law.
Option B: $85,000
$85,000 represents only 10% of the contract amount. While 10% is a common figure in some contexts (e.g., bid bonds), it is far too low for a performance/payment bond on a public works project.
Option C: $425,000
$425,000 represents 50% of the contract amount. Some jurisdictions allow reduced bond amounts, but Nevada requires the full 100% for public works projects.
Memory Technique
Public = Full Protection: the PUBLIC deserves FULL (100%) coverage. The bond equals the contract dollar for dollar — $850K project → $850K bond.
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