A Nevada Class B General Building contractor wants to bid on a public works project valued at $850,000. What additional bonding capacity must they demonstrate beyond their standard license requirements?
Correct Answer
A) $850,000
For public works projects, contractors must demonstrate bonding capacity equal to 100% of the project value. The contractor must show they can obtain an $850,000 bond for this specific project.
Why This Is the Correct Answer
For public works projects in Nevada, contractors must provide a performance and payment bond equal to 100% of the contract price. For an $850,000 project, that means $850,000 in bonding capacity must be demonstrated — equal to the full project value.
Why the Other Options Are Wrong
Option B: $85,000
$85,000 represents 10% of the project value. A 10% bond might be confused with bid bonds (which are sometimes 10% of the bid price), but performance/payment bonds for public works are 100%, not 10%.
Option C: $1,700,000
$1,700,000 is 200% of the project value. There is no Nevada requirement to bond at 200% of contract value. This option is a distractor that over-inflates the requirement.
Option D: $425,000
$425,000 is 50% of the project value. Some jurisdictions allow 50% bonding in limited circumstances, but Nevada public works law requires 100% bonding for full performance and payment protection.
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