Bid bonds protect the buyer if you win and walk away. Performance bonds protect them during delivery. Expectations vary by country and by contract value — but in every case, a bond that is missing, too small, or issued by an unapproved surety is grounds for rejection.
| Jurisdiction | Bid bond | Performance / payment bond |
|---|---|---|
| US federal (Miller Act) | 20% construction contracts over $150k | 100% performance + payment bond |
| US state / local | Varies; often 5–10% | Varies; common on construction |
| UK | Occasionally 5–10% on major works | Performance bonds common on PFI/construction |
| EU | Bid guarantee ~1–3% | Performance guarantee ~5% |
| Canada | Bid security up to 10% | Often 50% of contract value |
| Australia | Bid bond 1–2% typical | Performance bond 5–10% |
| Singapore | Bond sum stated in tender | Performance bond per contract |
1. Who must issue it. Many buyers require a surety on their approved list. A bond from your own bank may not be accepted.
2. The form. The RFP usually attaches the exact bond form. Using your insurer's standard form instead of the buyer's form is a common rejection.
3. The expiry. Bonds must stay valid through the award period — often 60–90 days. A bond that expires early leaves you exposed.