What is a Bid Bond in Maryland?
A bid bond is a type of surety bond, that guarantees that the bidder will accept the contract and complete it according to its terms. It provides assurance to the project owner that the bidder has the ability and capability to finish the job once you are selected after winning the bidding process. The simple reason is that you need one so that you get the work. But 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 long-time contractors going out of business, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable complete the work. So, they require a some protection.
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)
- Complete the form and email to [email protected].
- Be sure to include the RFQ/ITB (bid specs from the obligee).
Just fill out our bond application here and email it to [email protected] - click here to get our Maryland 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 5% or 10%, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Maryland?
Swiftbonds does not charge for a 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 P&P bond if you win the contract. 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 contract bond.
How much do bonds cost in MD?
Bond prices fluctuate based on the job size (that is, it's based on the cost of the underlying contract). The cost of a 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 Maryland. Please call us today at (913) 286-6501. We'll find you the very best rate possible for your maintenance bond or completion bond. 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. See our Performance Bond Cost page for more.
How do I get a Bid Bond in Maryland?
We make it easy to get a contract bid bond. Just click here to get our Maryland Bid Bond Application. Fill it out and then email it and the Maryland 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 each and every application for bid bonds and then submit it to the surety that we believe will provide the best bond for your job. We have a excellent success rate in getting our clients bid bonds at the very best rates possible.
Spearheading the Foundation of Maryland Bid Bonds
In our professional life, we’ve come to realize that Maryland bid bonds are essential tools in the world of construction and government contracts. A bid bond guarantees that a contractor will honor their bid and, if awarded the contract, will enter into a contract and provide the required performance and payment bonds. This type of surety bond provides protection to the project owner, ensuring that the contractor will not back out after winning the bid. Without this safeguard, government agencies and large organizations would face significant risks, which could lead to project delays and increased costs.
Orchestrating Your Search for Bid Bonds in Maryland
From our perspective, finding a bid bond provider in Maryland is relatively straightforward thanks to the many agencies and brokers specializing in surety bonds. Whether you're a contractor in Baltimore or Frederick, local bonding companies can provide fast and reliable services. In our dealings with bond agents, we’ve often noticed that the best agencies prioritize both speed and affordability.
Key Considerations When Searching for a Bond Provider
- Cost: We’ve consistently found that the cost of bid bonds varies, so it’s crucial to compare rates among providers.
- Reputation: Working with reputable bond providers ensures you get the right support if any complications arise during the bid process.
Empowering the Key Players in Maryland Bid Bonds
Based on our experience, the responsibility for obtaining a bid bond typically falls on the contractor. However, several key stakeholders are involved in the process:
Who Needs a Bid Bond?
- General Contractors
We’ve encountered situations where general contractors are the primary applicants for bid bonds, as they are responsible for large-scale public projects. - Subcontractors
In our observation, subcontractors may also need bid bonds for smaller segments of larger projects. - Surety Companies
Surety companies play a vital role in issuing the bonds, evaluating the contractor's qualifications, and ensuring that all conditions are met. - Project Owners
Government agencies or private organizations rely on these bonds to ensure that contractors honor their bids and perform the project as promised.
We provide bid bonds in each of the following counties:
Allegany
Anne Arundel
Baltimore
Baltimore City
Calvert
Caroline
Carroll
Cecil
Charles
Dorchester
Frederick
Garrett
Harford
Howard
Kent
Montgomery
Prince George’s
Queen Anne’s
St. Mary’s
Somerset
Talbot
Washington
Wicomico
Worcester
And Cities:
Baltimore
Frederick
Annapolis
Rockville
Ocean City
Silver Spring
Hagerstown
Gaithersburg
Laurel
Bowie
See our Massachusetts Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Tackling Bid Bonds with Practical Advice for Maryland Contractors
Through our own efforts, we’ve learned that a few practical tips can make the process of obtaining a bid bond much smoother:
- Know your financials: Surety companies will assess your credit and financial standing, so have these documents in order.
- Choose a reliable surety: Work with a well-established surety company to increase your chances of approval.
- Understand the project requirements: Each project may have specific bonding needs, so always verify what’s required before bidding.
- Start early: Allow plenty of time to get your bond in place before the bid deadline.
Strengthening the Importance of a Surety Bid Bond
We’ve found that a surety bid bond serves as a three-party agreement between the contractor (principal), the project owner (obligee), and the surety company.
How Surety Bid Bonds Protect All Parties
What we’ve seen firsthand is that the bond provides a financial guarantee that the contractor will not only bid in good faith but also honor their commitment to the project. Should the contractor fail to follow through, the bond compensates the project owner, ensuring no financial losses are incurred.
Streamlining How Bid Bonds Work in Maryland
We’ve consistently found that bid bonds operate by providing assurance to project owners that the winning bidder will perform the contract.
Understanding the Bid Bond Process
- Bid Submission
Contractors submit bids along with a bid bond to guarantee their proposal. - Bond Activation
If the contractor is awarded the project but fails to sign the contract or withdraws the bid, the bond compensates the project owner. - Penalties
The surety company may cover the difference between the winning bid and the next qualified bid or offer compensation up to the bond amount.
Revamping Your Strategy for Applying for Bid Bonds in Maryland
We’ve discovered through trial and error that applying for a bid bond involves several key steps:
The Application Process Explained
- Prequalification
In our view, the surety company evaluates your financial stability, project history, and credit score. - Submitting an Application
The application typically requires detailed business and financial information, so be prepared with these documents in advance. - Bond Issuance
Once the surety has approved your application, the bid bond is issued, and you’re ready to submit it with your bid.
Promoting Financial Stability with the Cost of Bid Bonds
We’ve been able to determine that the cost of a bid bond can vary depending on the size of the project and the contractor’s financial profile.
What Factors Influence the Cost of Bid Bonds?
In our dealings with surety companies, we’ve noticed that the premium for a bid bond usually ranges from 1% to 3% of the total bid amount. For smaller projects, the cost may be negligible, while larger projects might involve a more significant outlay. However, since bid bonds are usually part of a larger performance bond package, contractors should view this as part of the overall project cost.
Overcoming Challenges with Bid Bond Denials
We’ve come across several reasons why bid bond applications might be denied, including:
Common Reasons for Denial
- Poor Credit History
A low credit score can be a red flag for surety companies. - Insufficient Financials
If a contractor’s financials don’t demonstrate stability, they may not qualify. - Inexperience
Newer contractors without a proven track record may face more scrutiny.
Tips for Avoiding Bid Bond Denials
We’ve learned through doing that maintaining good credit, keeping solid financial records, and building a strong project portfolio are essential. Additionally, working with an experienced surety agent can help you navigate the process and improve your chances of approval.
Advancing Your Success with Maryland Bid Bonds
In our line of work, we’ve consistently observed that bid bonds play a critical role in the Maryland construction industry, ensuring the reliability and trustworthiness of contractors throughout the bidding process. Whether you’re a contractor looking to secure a government contract or a project owner seeking peace of mind, understanding the fundamentals of bid bonds is crucial. By following the advice we’ve shared and approaching the process with preparation, you can navigate the complexities of bid bonds with greater ease and confidence.
