A bid amount is $2,360,000 and bid security is required at 5 percent. What bid security amount is required?
Correct Answer
C) $118,000
Bid security is $2,360,000 x 5% = $118,000. Other choices use 1%, 10%, or 0.5% rather than the stated 5%.
Why This Is the Correct Answer
Bid security is $2,360,000 x 5% = $118,000. Other choices use 1%, 10%, or 0.5% rather than the stated 5%.
Why the Other Options Are Wrong
Option A: $23,600
bid security, choice b: $23,600 omits a required add-on/subtraction; the numeric gap is $94,400.
Option B: $236,000
bid security, choice c: $236,000 equals (1.05 - 0.95) x $2,360,000. That uses a difference and then multiplies by a stated factor/rate.
Option D: $11,800
bid security, choice d: $11,800 omits a required add-on/subtraction; the numeric gap is $106,200.
Memory Technique
Say the bid security rule aloud as a chain; the chain ends at $118,000, 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 $2,360,000 x 5% = $118,000.
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