California Bid Bonds

You can now get a Bid Bond (almost) instantly. For Bids under $100,000, click here

For all bids greater than $100,000, get our Express Application form:

Express Application (click to download form)

1. Complete the form and email to gary@swiftbonds. 
2. Be sure to include the RFQ/ITB (bid specs from the obligee).

What is a Bid Bond in California?

A bid bond is a type of surety bond, that guarantees that the bidder will accept the project and complete the contract according to its terms. It provides assurance to the project owner that the bidder has the expertise and wherewithal to finish the job once the bidder is selected after winning the bidding process. The basic reason is that you need one so that you get the work. However, the larger question is why are more owners/developers requiring a bid bond in the first place? The basic answer is risk. Given the uncertainty of the marketplace, which includes experienced contractors closing their doors, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable finish the work. Accordingly, they require a some protection.

Just fill out our bond application here and email it to [email protected] – click here to get our California Bid Bond Application

A bid bond is issued as part of a bid by a surety bond company to the project owner. The owner is then assures that the winning bidder will take on the contract under the terms at which they bid.

Most bid bonds contain a bid percentage (usually five or ten percent, is forfeited if you don’t accept the job).

How much does a Bid Bond Cost in California?

Swiftbonds does not charge for a surety bid bond (with two exceptions, see below). The reason that we don’t charge for a bid bond is that we will charge for the contract bond if you get the job. The cost of a bid bond can vary widely depending on the amount of coverage that is required (see below).

Two exceptions for bid bond charges:
1) We do charge for Overnight fees
2) We will charge you if there is NOT going to be a bond covering the underlying contract.

The cost of a final bond is estimated through a couple of back-of-the-envelope calculations.  In general, the cost is approximately three percent (3%) for jobs under $800,000 and then the percentage is lower as the contract amount increases. We work diligently to find the lowest premiums possible in the state of California. Please call us today at (913) 286-6501. Things that can affect this pricing are the perceived risk of the job, the financial position of the entity being bonded, plus other factors.

Bond Amount Needed	Fee
<$800,000	2-3%
>$800,000<$1,500,00	1.5-3%
>$1.500,000	1-3%

These rates are for Merit clients, Standard rates are higher

How do I get a Bid Bond in California?

We make it easy to get a contract bid bond.  Just click here to get our California Bid Bond Application.  Fill it out and then email it and the California bid specs/contract documents to [email protected] or fax to 855-433-4192. You can also call us at (913) 286-6501. We fully review all applications for bid bonds and then submit it to the surety that we believe will provide the best bid bond for your contract. We have a high success rate in getting our clients surety bid bonds at the best rates possible.

What is a California Bid Bond?

From our perspective, a California Bid Bond acts as a protective shield for project owners during the bidding process. It ensures that contractors will honor their bids and, if selected, will enter into a contract. This bond also provides financial security for the project owner, covering potential losses if the contractor defaults. Bid bonds play an essential role in California’s highly competitive construction industry, making them a necessary requirement for many public and private projects.

Finding Local Expertise for Your Bid Bond Needs

We’ve noticed that securing a reliable bid bond provider in California is crucial for ensuring compliance with state-specific regulations. Local surety companies possess the knowledge needed to navigate California’s legal landscape, helping contractors secure the appropriate bid bond while offering peace of mind for both contractors and clients.

The Essential Stakeholders Behind Every Bid Bond

In our opinion, bid bonds involve key stakeholders that benefit from their protective nature:

• Project Owners: Financially protected if the contractor fails to honor the bid.
• Contractors: They gain credibility by demonstrating financial responsibility.
• Surety Companies: They guarantee financial coverage for the project owner in case of default.

Contractors Who Rely on Bid Bonds in California

Based on our experience, bid bonds are typically required for:

• Contractors bidding on public infrastructure projects.
• Subcontractors on larger construction developments.
• Private contractors bidding on projects where bid security is required by contract.

Smart Strategies for Securing Your Bid Bond

We’ve gathered from our experience that when seeking a bid bond, contractors must focus on a few smart strategies:

• Financial Stability: Maintaining strong financial health is key.
• Choosing the Right Surety: Partner with a well-reputed surety company for dependable service.
• Organizing Documentation: Properly organizing all necessary documents speeds up the process.
• Meeting Project-Specific Demands: Ensure the bond aligns with the requirements of the specific project you are bidding on.

Why Surety Bid Bonds Are a Must for California Projects

We’ve learned over the years that surety bid bonds are vital for both contractors and project owners. They act as a financial guarantee that the contractor will follow through on their bid or face financial penalties, adding essential security, particularly for public projects in California, where they are often required by law.

Unpacking the Bid Bond Process: How It Really Works

We’ve consistently observed that bid bonds are an important part of the bidding process. Here’s a breakdown of how they work:

• Bid Submission: The contractor includes a bid bond to show commitment to the project.
• Surety Evaluation: The surety reviews the contractor’s financial health and risk profile.
• Contract Awarding: If the contractor defaults, the surety compensates the project owner for any financial losses.
• Reimbursement: The contractor is responsible for repaying the surety for any amounts paid out.

Step-by-Step Guide to Applying for a Bid Bond

We’ve worked with contractors who have successfully applied for bid bonds and found that following these steps ensures a smooth process:

1. Gather Financial Documents: Ensure all financial records are current.
2. Choose a Trusted Surety Provider: Select a company familiar with California’s regulations.
3. Submit Detailed Project Information: Provide the scope, budget, and timeline.
4. Complete the Application: Ensure your application is thorough and well-organized.
5. Undergo a Credit and Financial Evaluation: The surety will assess your financial standing.
6. Receive Your Bid Bond: Once approved, the bond is issued, and you’re ready to bid.

Key Application Requirements for a Bid Bond

From our experience, meeting certain requirements is essential to ensure approval. These include:

• Up-to-Date Financial Statements: Contractors must submit balance sheets, income statements, and cash flow reports to demonstrate financial health.
• Credit History: A good credit score is essential for bid bond approval. Surety providers will perform a credit check.
• Detailed Project Information: Contractors must provide clear project details, including the project’s scope, budget, timeline, and expected costs.
• Experience in Similar Projects: Demonstrating past experience with similar-sized projects can boost your chances of approval.
• Adequate Working Capital: Sureties want to see that contractors have the necessary working capital to support the project they are bidding on.

Cost Breakdown: What You Can Expect to Pay for a Bid Bond

We’ve come across many contractors who wonder about the cost of a bid bond. The cost is typically a percentage of the project’s total value, ranging from 5% to 10%. Contractors with strong financial profiles can expect to secure lower rates, while those with weaker financial standing may face higher premiums.

Avoiding Bid Bond Denial: Know the Common Pitfalls

We’ve observed that applying for a bid bond may result in denial if contractors fall into certain pitfalls:

• Poor Credit History: Low credit scores can be a dealbreaker.
• Weak Financials: Contractors lacking working capital or assets may struggle to get approved.
• Limited Experience: Inexperience with larger projects can cause concern.
• Legal Troubles: Ongoing lawsuits or past defaults are major red flags for surety companies.

How to Strengthen Your Application and Avoid Denial

From our perspective, contractors can avoid denial by:

• Improving Credit: Focus on raising your credit score before applying.
• Enhancing Financial Stability: Ensure that your financial statements reflect strength and liquidity.
• Gaining Project Experience: Start with smaller projects before tackling larger ones.
• Resolving Legal Issues: Clear up any legal disputes or history of defaults that may harm your credibility.

Wrapping Up: The Importance of Bid Bonds in California

In our line of work, we’ve consistently found that California bid bonds are essential for contractors aiming to secure public and private projects. By partnering with a trusted surety company, maintaining strong financial health, and submitting a thorough application, contractors can confidently bid on projects. Bid bonds provide necessary protection for all parties involved, making the bidding process more secure and reliable.

We provide bid bonds in each of the following counties:

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obispo
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

And Cities:
Los Angeles
San Francisco
San Diego
Sacramento
San Jose
Santa Barbara
Oakland
Beverly Hills
Santa Monica
Palm Springs
Long Beach
Santa Cruz
Malibu
Anaheim

See our Colorado Bid Bond page here.

More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.

Final Thoughts on California Bid Bonds

We’ve come to the realization that securing a California bid bond is a tender triumph for contractors looking to work on public projects. In our line of work, we’ve learned that a strong partnership with a reputable surety company, combined with careful financial preparation, can help contractors confidently bid on projects. Bid bonds offer essential protection for both project owners and contractors, ensuring the bidding process is fair, secure, and financially safeguarded.