A bid is $1,280,000, and the bid instructions require bid security equal to 5 percent of the bid. What bid bond amount is required?
Correct Answer
C) $64,000
Bid security is $1,280,000 x 5% = $64,000. Other choices use 0.5%, 4%, or 10% rather than the stated 5%.
Why This Is the Correct Answer
Bid security is $1,280,000 x 5% = $64,000. Other choices use 0.5%, 4%, or 10% rather than the stated 5%.
Why the Other Options Are Wrong
Option A: $6,400
bid bond amount, choice b: $6,400 omits a required add-on/subtraction; the numeric gap is $57,600.
Option B: $51,200
bid bond amount, choice c: $51,200 omits a required add-on/subtraction; the numeric gap is $12,800.
Option D: $128,000
bid bond amount, choice d: (1.05 - 0.95) x $1,280,000, gives $128,000. That calculation uses a difference and then multiplies by a stated factor/rate.
Memory Technique
Say the bid bond amount rule aloud as a chain; the chain ends at $64,000, not an intermediate stop.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Bid security calculation" to confirm that Bid security is $1,280,000 x 5% = $64,000.
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A utility trench is 180 ft long, 3 ft wide, and 7 ft deep with vertical sides inside a trench shield. What excavation volume is required?
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