Bid Guarantee Law and Legal Definition
Bid Guarantee is a form of security assuring that the bidder will not withdraw a bid within the period specified for acceptance and will execute a written contract and furnish required bonds, including any necessary coinsurance or reinsurance agreements, within the time specified in the bid, unless a longer time is allowed, after receipt of the specified forms. A bid guarantee usually consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder must, upon acceptance of the bid, execute such contractual documents as may be required within the time specified. Bid guarantees are generally required to be in an amount equivalent to five percent of the amount bid.
