A contractor is performing work on a public project in SC valued at $850,000. What is the required payment bond amount?
Correct Answer
B) $850,000
South Carolina requires payment bonds equal to 100% of the contract amount for public works projects over $50,000.
Why This Is the Correct Answer
South Carolina law requires payment bonds equal to 100% of the contract amount for public works projects exceeding $50,000. On an $850,000 contract, the full $850,000 bond protects subcontractors and suppliers who might not be paid.
Why the Other Options Are Wrong
Option A: $425,000
$425,000 represents only 50% of the contract value. SC does not allow a reduced 50% payment bond — the full contract amount is always required.
Option C: $1,700,000
$1,700,000 would be 200% of the contract value. No SC statute requires a payment bond that exceeds the contract amount.
Option D: $1,275,000
$1,275,000 represents 150% of the contract value, which has no basis in SC payment bond law.
Memory Technique
Think '100 = 100%': a payment bond is a 1-to-1 promise — every dollar of the contract is backed by a dollar of bond. No multipliers, no discounts.
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