The contract requires performance and payment bonds each in the full amount of the contract sum. Which bond amount should be furnished after award?
Correct Answer
D) One hundred percent of the contract sum for each required bond
If the contract requires each bond in the full amount of the contract sum, each bond's penal sum is 100 percent of the contract amount. Other choices understate or use unrelated project amounts.
Why This Is the Correct Answer
If the contract requires each bond in the full amount of the contract sum, each bond's penal sum is 100 percent of the contract amount. Other choices understate or use unrelated project amounts.
Why the Other Options Are Wrong
Option A: Apply the Ten percent of the contract sum limit to the bond penal sum check
The trap in A is Ten percent of the contract sum. That selection is wrong because it points to Ten percent of the contract sum, but.
Option B: Base the bond penal sum response on the first month's pay application
Choice B gives Only the first month's pay application. Its specific error: it leaves the work at an informal or incomplete stage, while Bond penal sum requires One hundred percent of the contract sum for each required bond.
Option C: Base the bond penal sum response on the subcontractor's largest purchase order
Choice C (The subcontractor's largest purchase order) is rejected because it leaves out the controlling Bond penal sum result: One hundred percent of the contract sum for each required bond.
Memory Technique
Make bond penal sum a tabbed card: cite the exact condition, then choose One hundred percent of the contract sum for each required bond.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Contract bond penal sum" to confirm that If the contract requires each bond in the full amount of the contract sum, each bond's penal sum is 100 percent of the contract amount.
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