What Is a Bid Guarantee?

Bid guarantee refers to the bidder submits a bid guarantee to the owner before or at the same time as the bid quotation. Once the bid is won, the contract is signed. Generally, the owner requires that each contractor submit a bidding proposal and submit a bidding guarantee or other bidding security (such as cash or securities). The bid guarantee guarantees that the contractor will perform the contract within a reasonable period of time based on the submitted price after receiving the project, and provide any other form of guarantee as required by the owner. The liquidated damages guaranteed by the bid are specified as a percentage of the contract price (generally 5% to 20%).

Bid guarantee

Right!

Bid guarantee refers to the bidder submits a bid guarantee to the owner before or at the same time as the bid quotation. Once the bid is won, the contract is signed. Generally, the owner requires that each contractor submit a bidding proposal and submit a bidding guarantee or other bidding security (such as cash or securities). The bid guarantee guarantees that the contractor will perform the contract within a reasonable period of time based on the submitted price after receiving the project, and provide any other form of guarantee as required by the owner. Liquidated damages for tender guarantees are specified as a percentage of the contract price (generally 5% to 20%).

If the contractor fails to sign the contract within the time limit of the bid after the bid is won, the guarantor must pay the right holder (owner) a certain amount of compensation. The compensation is the difference between the bid price and the second lowest bid price.

Chinese name

Bid guarantee

Object

contractor

Nature

good reputation

Features

Light bidding

effect

The role of bid guarantee is to ensure that the bidding contractor has a good reputation when quoting, and to prevent light bidding. Through the underwriting process, it was shown to the owner that the guarantee company had pre-examined the contractor's ability and credit status to perform the project, which restricted unqualified contractors from participating in bidding activities. ^[1]