Bid bond
Bidding guarantee at GfK
Definition
Security for a public authority or a company to comply with the terms of the offer in the event of awarding a contract.
Target group
Companies in the main construction and finishing trades participate in bidding procedures for awarding contracts.
Procedure
When awarding a public contract, a tendering procedure must be carried out. This may occur in the case of private contracts. For the duration of the tendering procedure, the contracting authority has a bid bond issued.
On the one hand, the guaranteed coverage additional costs that arise if the provider does not maintain its offer.
In addition, the surety is also liable if the bidder is awarded the contract and then fails to provide further security for the contractual performance of the services assigned to it by the award, including settlement.
This performance bond, which is owed but not provided, is then replaced by the bid bond.
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