Bid Bond
Definition of 'Bid Bond'A debt secured by a bidder for a construction job or similar type of bid-based selection process for the purpose of providing a guarantee to the project owner that the bidder will take on the job if selected. The existence of a bid bond provides the owner with assurance that the bidder has the financial means to accept the job for the price quoted in the bid. |
|
Investopedia explains 'Bid Bond'Bid bonds help the selection process of a job contract run smoothly. Without them, project owners would have little in the way of assurance that the bidder they select for a job would be able to properly complete the job without running into cash flow problems along the way. By providing bid bonds for their respective bids, each bidder for the project is able to provide sufficient assurance to the owner that the project is within its means. |
Related Definitions
Articles Of Interest
-
Basic Investment Objectives
You might know about different asset types, but do you know how each type contributes to a particular goal? -
Corporate Bonds: An Introduction To Credit Risk
Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy. -
Advanced Bond Concepts
Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration. -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods. -
Top 5 Budgeting Questions Answered
You don't need a degree to understand your money, begin saving and pay down debt. -
Asset Allocation: The First Step Toward Profit
Understanding the different asset classes is an essential part of portfolio diversification. -
Junk Bond
Find out more about these bonds that have a high risk of default. -
Guaranteed Retirement Income In Any Market
By laddering annuities, you can be sure you'll have income no matter what the market does. -
Debentures
Learn more about this type of debt instrument.
Free Annual Reports