A contractor is required to provide a performance bond for a public project. The project value is $180,000. What is the typical bond amount required?
Correct Answer
A) $180,000
Performance bonds for public projects in Georgia are typically required at 100% of the contract value, so $180,000.
Why This Is the Correct Answer
Performance bonds for public projects in Georgia are required at 100% of the contract value. A $180,000 project therefore requires a $180,000 bond, ensuring the owner is fully protected if the contractor defaults.
Why the Other Options Are Wrong
Option B: $90,000
$90,000 represents 50% of the contract value. Performance bonds are not set at half the contract amount; 100% coverage is the standard requirement for public projects.
Option C: $360,000
$360,000 is double the contract value. Bond amounts never exceed the contract value under standard Georgia public project requirements.
Option D: $135,000
$135,000 is 75% of the contract value. This percentage has no basis in Georgia bonding requirements for public projects.
Memory Technique
Think '100% protection for the public.' Public money demands full-value bonds — the bond dollar amount equals the contract dollar amount, one for one.
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