What does a performance bond primarily assure?
Correct Answer
A) Completion of the bonded contract obligations if the contractor defaults.
A performance bond assures the owner's contract performance remedy if the contractor defaults.
Why This Is the Correct Answer
A performance bond assures the owner's contract performance remedy if the contractor defaults.
Why the Other Options Are Wrong
Option B: Payment of only the contractor's payroll taxes
In procurement and contracting, Payment of only the contractor's payroll taxes. is the wrong selection for Performance bond purpose: it tries to bypass the Performance bond purpose checkpoint.
Option C: Approval of substitutions
The trap in C is Approval of substitutions. That selection is wrong because the option does not produce the required Performance bond purpose outcome, Completion of the bonded contract obligations if the contractor defaults.
Option D: Treat the performance bond as requiring correction of every design error
Choice D gives Correction of every design error. Its specific error: it points to Correction of every design error. but.
Memory Technique
Make performance bond purpose a tabbed card: cite the exact condition, then choose Completion of the bonded contract obligations if the contractor defaults.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Performance bond" to confirm that A performance bond assures the owner's contract performance remedy if the contractor defaults.
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