What risk does a bid bond primarily protect the owner against?
Correct Answer
A) The successful bidder refusing to enter the contract or furnish required bonds.
Bid security protects the owner if the successful bidder does not honor the bid or provide required bonds.
Why This Is the Correct Answer
Bid security protects the owner if the successful bidder does not honor the bid or provide required bonds.
Why the Other Options Are Wrong
Option B: Treat an architect's missing detail as the risk covered by the bid bond
Choice B (The architect missing a detail.) is rejected because it points to The architect missing a detail. but.
Option C: Treat the owner's occupancy change as the risk covered by the bid bond
In procurement and contracting, The owner changing occupancy plans. is the wrong selection for Bid bond purpose: it answers the Bid bond purpose prompt with the wrong practical move.
Option D: Treat early supplier shipment as the risk covered by the bid bond
The trap in D is The supplier shipping early. That selection is wrong because it leaves out the controlling Bid bond purpose result: The successful bidder refusing to enter the contract or furnish required bonds.
Memory Technique
File bid bond purpose under a panel space: condition first, number or duty second, answer The successful bidder refusing to enter the contract or furnish required bonds.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Bid security" to confirm that Bid security protects the owner if the successful bidder does not honor the bid or provide required bonds.
More NASCLA Questions
Bid instructions require bid security with each sealed bid. Which purpose should the estimator associate with that requirement?
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